http://www.fin.gc.ca/news08/08-051e.html
The Government of Canada today announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian housing market. The new measures include:
* Fixing the maximum amortization period for new government-backed mortgages to 35 years;
* Requiring a minimum down payment of five per cent for new government-backed mortgages;
* Establishing a consistent minimum credit score requirement; and
* Introducing new loan documentation standards.
http://www.canadianmortgagetrends.com/
This will be a big surprise to many. The Department of Finance has just announced that it will no longer back the following:
* 100% financing (5% will now be the minimum downpayment on an insured mortgage)
* 40 year amortizations (35 years will be the new maximum on insured mortgages)
The government will also require the following with all new mortgages it backs:
* A new 620 minimum credit score requirement
* 45% maximum TDS ratio
* New loan documentation standards
The new rules will take effect October 15, 2008. This affects CMHC insured mortgages as well as mortgages insured by Genworth, AIG, etc. Insured mortgages are generally those with less than 20% down. Certain conventional mortgages are also insured, however.
